On Thursday, The Economic Coordination Committee (ECC) decides to outsource the operation of major airports. The airports include Lahore, Islamabad, and Karachi.
According to the sources, ECC will work on a nine-point agenda on Thursday, including outsourcing the operation of major airports in Karachi, Islamabad, and Lahore.
Moreover, per the sources, the Federal government has considered different options to outsource the operation of major airports in Pakistan.
The decision aims to improve passenger services and optimize the realization of their revenue potential in the last few years.
In the shadow of this decision, the Federal Cabinet conveyed different choices. To fulfill it, hiring an audit company to draught proposals for the corporation of airports also invited expressions of interest.
The Federal Government established a committee of Ministers too. Monitor the entire process. However, the process could not attain finality.
During a meeting held on 30 December 2022, the PM directed outsourcing the operation of three airports, including Karachi, Islamabad, and Karachi.
In addition, the operation will take place expeditiously by engaging a leading International Financial Institution (IFI) under the Public Private Partnership Authority Act,2017.
Though, Section 31 of the Act is identical to Section 5 (2) of the Public Private Partnership Authority Regulations, 2023.
Accordingly, it permits using an IFI as a transaction advisor through direct contracting as long as it has the board’s approval.
Moreover, Pakistan Civil Aviation Authority (CAA) requests Public Private Partnership Authority Board permit them to engage an IFI as a transaction advisor for outsourcing the operation of the three major airports.
The application got approved on 11 January 2023 by the board. After getting the approval, PCAA contacted all eligible IFIs for direct engagement as transaction advisors.
Hence, they were requested to provide all the necessary details against the selection criteria approved by the PCAA board.
Later, they were discovered as a qualified professional to function as transaction advisors.
The viewpoints of the Ministry of Finance, Federal Board of Income, and Ministry of Foreign Affairs, a draft deal Advisory Agreement (TASA) was entirely aided by the IFC after a long and step-by-step process.
TASA is based on a success fee model with penalties for the client who decides not to proceed with the transaction. Our side needs to have a strong political commitment to outsourcing the operation of the three tragic airports.
The above mentioned agreement and commitment will positively impact the economy and promote good competition. However, it will also help in building the confidence of the IFC.
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